Henkel has a long tradition of reporting, publishing its first Environmental Report in 1992, surely they are one of the reporting pioneers. During 2008, Henkel acquired National Starch with 6,000 employees in 40 countries. National Starch is referred to over 20 times in this 37 page report, but there is little background. National Starch data is integrated into Henkel data and shown separately in some cases, not always clear where. I would have welcomed more detail about business rationale for this acquisition, its impacts, sustainability challenges and opportunities.
Henkel's report starts out with a description of the Sustainability Council (10 men, 1 woman – is that sustainable?) and continues with its leadership of the business and its sustainable innovations such as new eco household cleaners and cosmetics. The 5 "focal areas" include 3 environmental objectives (water, energy and waste) and health & safety and social progress, supported by 4 quantified targets to be achieved by 2012. It's a rare thing to see such specific commitments in a social report, so well done to Henkel on this one. Core material issues relevant to a household care and cosmetics manufacturer are covered: product life-cycle including consumer habits, packaging impacts, sustainable raw materials, animal testing, logistics and distribution. Bio toothpaste sounds interesting….
Henkel operates production sites in 57 countries – that's some complexity for a 14 mill Euro business. Data in the report is from 226 sites which represent 95% of the business. I tried to see how many sites Henkel operate in total but I couldn't find a number.
The employee disclosures are disappointing. The challenges of integrating a large business such as National Starch are ever-so-briefly mentioned, and references to employee development, advancement, diversity and outplacement of 3,000 job reductions are unexplored in real depth. Henkel shows women represent 13.7% of top management, and 26.4 % of total managers – one of the few pieces of data which is shown only for 2008 and not presented over several years. I checked previous reports and note that these numbers haven’t changed significantly since 2005, despite Henkel's commitment to the Millennium Goals (number 3 - promote gender equality). Henkel ‘Smile’ community programs include MIT (Make an Impact on Tomorrow) and again I find that what is measured is the number of employee volunteering hours and not the IMPACT that these hours have on local communities. When will we start to see reporting of impacts in social reports, and not just reporting of inputs?
The GRI Index, one of my first anchor points in any report, is on the website and not in the printed report. But the website link leads to a page "under construction". Hmmm. Sherlock, where is that GRI index ? However, Henkel's report is clear, easy to read and although largely narrative, it is sprinkled with data presented in context. Improvements through the supply chain (p7) show the flow of work and Henkel's activities in each process. Henkel says "all new products contribute to sustainable development in at least one of our five focal areas" – which is quite the essence of an integrated triple bottom line strategy. An example is the Bonderite NT process for nanoceramic coating instead of iron phosphate coating, which saves 30% energy consumption. A detailed example is on their website here : http://tinyurl.com/cxtk36. Sounds good. Wonder how many tons of coating they sell and how much energy has actually been saved? At least I have now discovered that there is something in the world called nanoceramic coating.
Henkel presents a strong and mainly credible sustainability picture in this report. It is centered around products and sustainable innovations, and speaks to consumers in a convincing way. It builds on what appears to be several years of investment and evolution of Henkel's approach, making both their activities and reporting quite impressive. Henkel presents the good news without glorifying it, though there is a noticeable absence of in-depth discussion of risks and challenges and the section on stakeholder dialogue is, sorry, pretty pathetic. Operational incidents such as pollution caused by a solvent leak in Brazil are disclosed, as is explanation of fatalities, but nothing that has not already been in the public eye is allocated space in this report. I miss the lack of any form of assurance or external verification. I wonder if Henkel has become just a little complacent in their approach to reporting? I think there is an opportunity to make a step-change for greater impact.
1. Assure the report
2. Make that hidden GRI Index available
3. Report IMPACTS not only INPUTS
4. Drive greater sustainability actions in the workplace and reflect them more fully
Elaine Cohen is the Joint CEO of BeyondBusiness Ltd, www.b-yond.biz, a leading CSR reporting and consulting firm in Israel, specializing in a wide range of consulting services for the development of social and environmental responsibility of businesses.